House/Senate Panel To Take Up Financial/Privacy Measure
House and Senate conferees were scheduled at deadline to begin discussions on a legislative compromise to overhaul regulation of the financial services industry which contains several controversial privacy protections.
One of those privacy protections, opposed by the Direct Marketing Association, would prohibit financial institutions from disclosing encrypted bank and charge account numbers to third parties without an individual’s written permission. Those third-party companies include list companies and direct marketers.
The Direct Marketing Association will continue to press lawmakers to either soften that provision, or eliminate it altogether from the final version of the bill, said Richard A. Barton, senior vice president of Congressional matters. The bill would then go to President Clinton who indicated he will veto the measure for unrelated reasons.
Although the conference committee’s discussions on the revised Financial Services Modernization Act could last until next week, committee chairman Rep. James Leach (R-IA), who’s also House Banking Committee Chairman, along with House Commerce Committee Chairman Tom Bliley (R-VA) and Senate Banking Committee Chairman Phil Gramm (R-TX), are all looking for quick committee approval so the measure can be sent to the House and Senate for ratification by next Wednesday.
The revised legislation still contains provisions that prohibit banks, securities firms and insurance companies from sharing the personal data of their customers with outside firms.
A provision in earlier versions of the bill dealing with the sharing of an individual’s medical information by banks and affiliated insurance companies has been eliminated, the lawmakers said.
In a related development Tuesday, President Clinton signed into law a $49.5 billion transportation appropriations bill containing new privacy protections for motorists.
The measure, doling out government aid to state and local governments for roads, bridges, and mass transit systems requires states to obtain the written permission of licensed drivers and registered motor vehicle owners before making information about them available to third parties for marketing purposes.
